At the rate at which New Mexico pumped money into its $4 billion Severance Tax Permanent Fund in 2013, the fund won’t be growing much anytime soon.

For the year, the state invested a total of $85 into the fund, the result of years of changing the funding formula and diverting money away from the state’s second largest permanent fund.

The $85 investment — out of more than $400 million in severance taxes collected by the state — has some state lawmakers shocked and ready to introduce legislation to try to reverse the trend.

“We put $85 into the Severance Fund because we continue to pass bills that intercept money that goes into it. We have absolutely ruined it,” said state Sen. Sue Wilson Beffort, R-Sandia Park. “It won’t be long before the corpus starts shrinking and I predict that finally legislators will come to our senses. We either turn this around or we will end up ruining our Severance Tax Permanent Fund.”

New Mexico State Investment Council spokesman Charles Wollman said the fund totaled $4.3 billion at the end of 2013, below its high of $4.8 billion in October 2007. That’s despite a record year for the stock market in 2013, Wollman added.

State Sen. John Arthur Smith, D-Deming, said the diversion of money from the fund has prevented it from growing.

“We are diverting money that goes into it and it has been at the $4 billion level for five or six years,” Smith said. “We’re distributing less money [from the fund] because it hasn’t been keeping up with inflation.”

The fund was created in 1973 with the idea that half the severance taxes from minerals taken from the ground would be put into the fund to help it grow and provide interest revenue for future generations when the minerals were gone, Wollman said. The other 50 percent went to bond capital projects for schools and other entities.

But over the years, lawmakers and the courts have eroded the amount that goes into the fund so that between 2010 and 2013, 6 percent of the $1.7 billion in severance taxes collected went into the fund, according to figures from the SIC.

The fund spins money into the state’s general fund at the rate of 4.7 percent of a rolling, five-year average earnings rate, Wollman said. In the coming fiscal year, the fund is expected to provide $182 million to the general fund, compared to $170 million last year and $191 million in FY2009.

The diversion of money from the fund “has been a major concern of the [State Investment] Council for some time, and this year, every legislative committee, every lawmaker we talked to about this problem was supportive of taking steps to fix the system and rebalance the equation of what we are spending versus what we are saving,” Wollman said. “The key is to strike a proper balance.”

The diversion of money from the fund began in 1999 when a state court judge ordered the state to provide more capital outlay money to public schools in low-income districts. To meet the requirement, the state cut into the 50 percent portion that was supposed to go into the fund. And more recently, the Legislature decided to fund infrastructure projects for tribes and communities in the state from the money that was supposed to go into the fund.

Wilson Beffort said she is working on legislation to restore some of the revenue stream back into the fund.

“We will try to reform some of the intercept bills that we have formally passed into law. It’s the Legislature’s fault that we continue to erode the Severance Tax Fund,” Wilson Beffort said.

Here’s the amount of money the state has invested into the fund in various years since 1990: